I've been an entrepreneur for as long as I can remember. As a kid, I started selling cool rocks even before I sold lemonade. At age 8, I hired my two friends to deliver newspapers and gave them 75 cents a day, and I kept 25 cents. I've gone on to start much larger companies, divisions within companies, both within the US and outside, that have led to both success and failure. Venture backed, partnerships, bootstrapped, high growth, retail, commercial real estate, technology, energy, B2B, B2C, B20 - nobody is there to buy) and more. I’ve learned my greatest life and business lessons from my failures. I recently completed a book for Wiley & Sons, entitled The 7 Non Negotiables of Winning: Tying Soft Traits to Hard Results, which you can read about here: http://www.7nns.com. My current company, Fishbowl, is a culmination of everything I’ve learned over my 30-plus business years.

What A Fighter Pilot Knows About Business: The OODA Loop

Chris Taylor speaks at tech conferences and manages SuccessfulWorkplace.com. He can be found at @FindChrisTaylor.

I was very impressed by a piece Chris Taylor recently published for Venture Beat. Chris is a fellow business columnist, an executive with TIBCO Software, and, most interesting of all, a former U.S. Navy pilot (imagine the excitement in a career path like that).

I’m amazed by the aspects of fighter pilot training that we can also apply to running a successful business. What he learned as a pilot is more applicable than he could have ever imagined. We live and work in a time of great disruption. We face difficulty and even danger. And, like training to become a fighter pilot, the preparation for beginning a business can be so arduous that the majority of great ideas and prospects never succeed in making it off the ground.

Chris Taylor as a U.S. Navy flyer

So what are the secrets fighter pilots know that the rest of us could benefit from? With Chris’ permission (and with no breaches of national security law), I’d like to share the process America’s fighter pilots have been trained to understand and follow since the 1950s:

The OODA Loop: Observe, Orient, Decide and Act. In a nutshell, the “disruptor’s handbook.”

It was Air Force pilot John Boyd who first introduced OODA. In the ’50s, during the Korean War, American pilots were flying aircraft that were less maneuverable than their opponents’. However, he observed that despite the advantages of the Russian-made MIG-15s, the American F-86s won a majority of dogfights because they provided a better field of vision and hydraulic controls that were faster and easier to use.

American pilots had clear advantages in Observing and Acting, the first and last stages of the OODA Loop. They were able to disrupt their adversary’s process (in spite of the weaker equipment) due to better information and faster execution.

We can do the same. Business coach Terry Deitz (a former U.S. Navy F-14 pilot who speaks and presents for an organization called Afterburner) notes, “In warfare and in business, the speed at which the OODA Loop is executed becomes the largest factor in disrupting the enemy.”

In short, here’s how the OODA Loop applies to business, according to a recent presentation by Roy Schulte, Gartner vice president and distinguished analyst:

1. Observation is the discipline of gathering data on what’s happening in a company and its environment. The key challenge to effective observation, especially in the era of “big data” is knowing which elements of information to monitor and how to apply the right filters to each. For example, customer renewal rates, length of engagement, return rates, and customer support rates are pieces of information that are critically important to us. We watch what our competitors are doing, as well—but we put a particularly strong focus on the information our customers provide (both directly—in feedback—and indirectly in the size of sales, length of engagement, and the frequency and severity of customer service complaints).

2. Orientation refers to the discipline of monitoring the outside environment by calculating key performance indicators, making predictions, and issuing the right alerts to key decision makers. This process requires the combination of software tools (such as inventory and financial software) and human judgment to put the information into context with past experiences and business understanding to quickly and accurately predict what to expect next.

3. Decision-making is the discipline of using the data and the orientation to make better, faster, and repeatable decisions at the least possible cost when necessary. In an optimal business situation many decisions can be “pre-loaded” and anticipated. This is especially true in inventory management. Whether it refers to people, resources, supplies and especially to expensive and perishable goods, inventory includes basically all of the company’s assets. The ability to predict rush seasons or popular products and order and store the right elements can make the difference between high profitability, level growth, and failure.

4. Action refers to business process management (BPM). The right actions may require workflow or process orchestration, whether manual or via software, to control the flow of work and to trigger the execution of human (or automated activities) at the right time.

Even without the heart-pounding thrill of barrel rolls or the fierce competitive environment of battle, the OODA Loop is a powerful weapon for all. However, there’s one more step that makes the strategy fully complete.

Deitz points out the value of completing the OODA loop with an immediate and thorough debriefing. In the military, the debriefing process is nameless and rank-less to ensure every relevant opinion and observation is heard.

In business, we may not need to go so far as to make the feedback sources anonymous. But courage, candor, trust, and respect are essential to make the debriefing element of the business process as effective as it can possibly be.

As Deitz points out: “90 percent of today’s businesses have neither the processes in place nor the proper culture to debrief. Do you want to accelerate your version of the OODA Loop to supersonic performance? Then create the culture and processes to put the knowledge you capture back into your next mission at Mach speed.”

Deitz and Schulte raise some interesting points. Disruption in business is here to stay. Today’s nimble businesses, as real-time innovation labs operating in tight iterations and striving to be faster than the competition, are increasingly replacing traditional suppliers and factories.

I love Chris’ conclusion: those who see disruption as an advantage and who understand the twin values of the OODA Loop and debriefing have a chance at joining the mythical place in business held by the world’s most acknowledged leaders, such as Steve Jobs and Bill Gates. I believe him—and I believe the world holds ample room for stunning achievements by the thousands of successful and growing businesses smaller than Apple and Microsoft, as well. Perhaps your business is one of them. I welcome your thoughts.

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What I find interesting is that one of the most important aspects of the OODA model is the need for immediate, honest and unencumbered evaluation and feedback. I think perhaps that may be the most valuable take away. If we cannot honestly critique our strategy and tactics then one may continue to make mistakes or critical lapses in judgement without knowing they are being made and if not corrected may have dire consequences. The other interesting part of the post-action analysis is Dietz posits that “courage, candor, trust, and respect are essential to make the debriefing element of the business process as effective as it can possibly be.” Hmmmm, sounds like the essence of Dave’s 7NNs are seeing a real and actionable application in a very important business process where measurable hard results can be observed.

Right on. The 7 Non-Negotiables: Respect, Belief, Trust, Loyalty, Commitment, Courage and Gratitude need have taken root and started to grow before the OODA Loop could work, or otherwise, usually the leaders, not the enemies, shoot you down.

I especially enjoyed this point: “In the military, the debriefing process is nameless and rank-less to ensure every relevant opinion and observation is heard.” I had never heard how debriefing works in the military, and that sounds like the best way to do it. No concern about rank or position. It’s all about discovering the truth about a situation and learning how to do things better the next time. Everyone can learn from that and apply it in many different ways.

I love this article, David – and am grateful Mary brought the information about OODA forward. Chris Taylor rocks. This is a very inspiring approach to business for any company or team. I won’t be forgetting these steps. (Especially the debrief–brilliant). Thank you!